KFC's Market Leadership in China

QUESTION 1

Today, KFC is the leading fast-food company in China. It controls a major portion of the market, which essentially is more than that of McDonalds’ in the Asian country. There are a number of factors that have helped the company to attain such profound success in the country (Shen & Xiao, 2014). One such key reason is the fact that the company infused the Western brand with Chinese characteristics, which essentially appealed to and attracted the Chinese local customers (Zhu & Anagondahalli, 2017). In this regard, it is said that KFC’s managers sought to reach out to the local people and understand their cultures and beliefs, which made the company a part of the local community. This was one of the main factors that contributed to the success of the firm. For KFC’s managers, it was all about developing a positive and unique perception in the market so that the local customers can be influenced, and their buying behaviour can be altered (Bell & Shelman, 2011). Here the company tried to make KFC’s brand as a restaurant that offers a variety of food items, including traditional Chinese dishes. These efforts helped the company in attracting local customers. Another key reason that contributed to the major success of KFC in the country was the fact that it focused on expanding rapidly. While McDonalds’ had outlets in four big cities of China, KFC, instead of competing directly with its rival brand, relied on opening its outlets in smaller cities, thereby enhancing its overall reach and also expanding the customer base substantially (Rui & Huang, 2016). It can be expected that similar trends will continue in the future as well. This means that KFC will experience exponential growth in the Chinese market.

QUESTION 2

Irish and Chinese cultures are very different. While Irish people like cheese, the Chinese are not big fans of cheese, but they use it many of their dishes. For the company looking to expand into China, it will be important to study and analyse the cultural differences (Kwon, 2012). The cultural factors can be better understood through Hofstede’s Cultural Dimension, which states there are five dimensions to culture, as shown in Figure 1. The very first dimension is Power Distance. It tells about the society and its belief regarding equality among all its members. China scores very high in this dimension – 80 – which means that the Chinese society and its people believe that inequalities among the people are acceptable (Viberg, 2013). Analysing this factor further indicates that the Irish cheese company will have to adopt a more formal approach for managing the business. Individualism is the second dimension, according to the model. It deals with people’s self-image, which id then defined in terms of ‘I’ and ‘We’. China scores 20 in this dimension, which means that the Chinese people believe in teamwork and for them achieving targets of the team is more important than fulfilling personal goals. This aspect can be useful for the Irish firm because it would develop confidence in the company that it can operate well in the country (Hur & Kang, 2015). Masculinity is the third dimension which deals with the factors that drive competitiveness and motivates the communities. China’s score is 66, which means that its citizens are highly driven, and they give paramount importance to achieving the targets set for them. They want to achieve success, which can be a very useful aspect for the Irish company (Rui & Huang, 2016). Uncertainty avoidance is regarding risk-taking abilities of society. It presents the extent to which people feel threatened or uncertainty. China scores only 30 in this dimension, which means that the Chinese people are not very comfortable dealing with uncertain or risky situations (Shen & Xiao, 2014). The aspect of long-term orientation tells about how a society maintains links with its past while dealing with challenges of the present and preparing for the future. China’s score is 87, meaning that the Chinese people learn from their past activities and performances for present-day and future activities. The last dimension is an indulgence. It is related to the extent to which people control their desires and impulses. The Asian country scores 24, meaning that its people are not able to exert control on their demands and requirements (Hur & Kang, 2015).

QUESTION 3

3a)

The CAGE Framework recognises the Cultural, Administrative, Geographic, and Economic contrasts between the different nations that organisations should address and deal with while taking a shot at and making global procedures (Neelakandan & Jiménez, 2015). The structure can likewise be utilised to comprehend the examples of capital, exchange, the progression of individuals, and data that function as essential elements for the association. Reis (2015) stresses that various kinds of separation matter to various degrees relying upon the business. Since geographic separation, for example, influences the expenses of transportation, it is of specific significance to organisations managing in substantial or massive items. Social separation, then again, influences purchasers' item inclinations (Hasan & Ibrahim, 2016). It ought to be a critical thought for shopper products or media organisation, yet it is significantly less significant for a concrete or steel business.

3b)

The analysis of the CAGE Framework encourages the organisation to recognise the chances and holes and, in this manner, put resources into the beneficial remote markets (Beugelsdijk & Ambos, 2017). The application and working of CAGE Framework help the organisation to distinguish the appealing and rewarding global markets dependent on the crude material costs, simple access to target markets and buyers, access to potential HR, and other such critical business criteria.

QUESTION 4

4a)

Price Escalation can be defined as an idea or ideal situation where price increases when the goods are exported and imported into a new market. This means that the prices charged are more when the country either exports to or imports from new foreign markets. It is very closely related to inflation (Wood & Nelson, 2012). To overcome price escalation, there are many solutions. For instance, emphasis can be on selling the goods only locally. However, it would reduce profitability. Therefore, while selling internationally, it can be overcome by identifying free trade zones. In such areas, no additional costs are charged during the manufacturing and selling processes.

4b)

A parallel import is a non-fake item imported from another nation without the consent of the licensed innovation proprietor (Hwang & Peng, 2014). Equal imports are frequently alluded to as dim item and are ensnared in issues of global exchange, and licensed innovation. Equal bringing in depends on the idea of depletion of licensed innovation rights: as indicated by this idea, when the item is first propelled available in a specific locale, equal importation is approved to all inhabitants in the state being referred to.

QUESTION 5

5a)

Multichannel marketing is termed as the practising of interacting with customers through a number of different direct and indirect channels of communication. It includes the likes of websites, mail orders, direct mails, and many more. It helps companies to reach out to their customers and interact with them in an efficient and effective manner. According to Pantano (2015), it helps companies in getting a better understanding of their target customers and also inform them about firms’ products and/or services. On the other hand, integrated marketing communication is defined as an approach to planning the communication systems to help the company to achieve its goals and targets. Payne & Peltier (2017) states that using such a method of marketing enables the firm to obtain better results, due to enhanced performance, because it has more information about the needs and demands of the customers. According to Hwang & Peng (2014), it also helps in attracting and retaining the customers.

5b) 4Cs Framework in Integrated Marketing Communication

Marketers must pay attention to ensuring that the integrated marketing campaigns have all the four elements of the 4Cs model – coherence, consistent, continuous and complementary (Reis, 2015). For instance, an organisation and its marketing team should develop messages in such a manner that they are coherent and consistent with firms; mission and vision and also the channels must be selected and used so that they maintain continuity of the message(s) and are complementary to firms’ overall strategies and tactics.

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QUESTION 6

As per Viberg (2013), Global-Integration and Local-Responsiveness hypothesis, the outside condition is summed up into two determinant factors: worldwide mix and local responsiveness. Weight of worldwide incorporation (GI) is unequivocally influenced by the level of ―the globalisation of market‖ and ―efficiency additions of normalisation. Alongside the globalisation pattern, the globalising market turns out to be increasingly well known (Neelakandan & Jiménez, 2015). There are incalculable normalised items overall, for example, Apple cell phones and tablets, Coca Cola drinks, Zara designs, to give some examples. It benefits clients as they could get elevated requirement quality items at a low cost. Normalisation likewise carries upper hands to firms. Firms could accomplish effectiveness from large scale manufacturing, diminish cost, and control items' quality. It, along these lines, is by all accounts the case that the higher weight of worldwide joining is, the more advantage the two providers and purchasers could get (Hasan & Ibrahim, 2016).

REFERENCES

Shen, Q., & Xiao, P. (2014). McDonald's and KFC in China: Competitors or Companions? Marketing Science, 287-307.

Zhu, L., & Anagondahalli, D. (2017). Social media and culture in crisis communication: McDonald’s and KFC crises management in China. Public Relations Review , 487-492.

Rui, Y., & Huang, H. (2016). A Comparative Analysis of the Distributions of KFC and McDonald’s Outlets in China. ISPRS International Journal of Geo-Information , 27.

Viberg, O. (2013). "Cross-cultural analysis of users' attitudes toward the use of mobile devices in second and foreign language learning in higher education: A case from Sweden and China. Computers & Education , 169-180.

Neelakandan, P., & Jiménez, A. (2015). An Autocatalytic System of Photooxidation‐Driven Substitution Reactions on a FeII4L6 Cage Framework. Angewandte Chemie, 14586-14590.

Hasan, M., & Ibrahim, Y. (2016). Institutional distance factors influencing firm performance: A hypothetical framework from cross-border mergers and acquisitions. The Journal of Developing Areas , 377-386.

Wood, B., & Nelson, C. (2012). Poverty effects of food price escalation: The importance of substitution effects in Mexican households. Food Policy, 77-85.

Hwang, H., & Peng, C.-H. (2014). Parallel imports, product innovation and market structures. International Review of Economics & Finance, 237-245.

Pantano, E. (2015). Engaging consumers on new integrated multichannel retail settings: Challenges for retailers. Journal of Retailing and Consumer Services, 106-114.

Payne, E. M., & Peltier, J. (2017). Omni-channel marketing, integrated marketing communications and consumer engagement. Journal of Research in Interactive Marketing.